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The City Pub Group PLC on Wednesday said it returned to profit in the first half of 2022, as trading levels returned to pre-Covid levels.
City Pub Group's recorded a pretax profit of just £77,000 in the six months that ended June 26, swung from a loss of £1.6 million in the same period last year.
Revenue nearly tripled to £26.1 million from £8.9 million last year as trading returned to 2019 levels.
City Pub Group is intending to begin a £3 million share buyback programme as it thinks ‘the share price does not reflect the value of the company’. The buyback programme will be in place of a dividend.
Shares in the London-based pub operator were trading 6.5% higher at 57.00 pence each in London on Wednesday morning but are down by half over the past 12 months.
The company has low levels of debt and a large number of freeholds in its estate, which gives the company strong asset backing and high operating margins, it noted. Additionally, the company said that its low levels of gearing will allow it to ‘take advantage of the opportunities that will arise from these most challenging times, when appropriate.’
In the face of macroeconomic instability, the company will focus on its existing estate. However, it also intends to purchase further shares in the Mosaic Pub and Dining Group, in which it currently has a 37% stake, to give control in 2023.
Chair Clive Watson said: ‘Trading volumes, as anticipated, have returned to pre Covid levels and are holding up in a very challenging cost environment. Inflation continues to impact our business.
‘The disposal of six pubs in April for £17 million has put the company in an even stronger position with very low net debt and what we believe is amongst the lowest gearing in the sector, however we continue to urge the Government to do more for hospitality particularly on business rates and providing two-three year visas to alleviate the labour shortages.’
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